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Dems present proposal to repeal 2016 law on short-term, vacation rentals

Real estate broker Greg Hague explains why he believes the 2016 law stripping local governments of their ability to regulate short-term rentals should be repealed. With him are Reps. Isela Blanc and Aaron Lieberman, the prime sponsors of a bill introduced Friday to do just that. (Capitol Media Services photo by Howard Fischer)

Real estate broker Greg Hague explains why he believes the 2016 law stripping local governments of their ability to regulate short-term rentals should be repealed. With him are Reps. Isela Blanc and Aaron Lieberman, the prime sponsors of a bill introduced Friday to do just that. (Capitol Media Services photo by Howard Fischer)

Calling the law a mistake, two House Democrats are leading the charge to repeal a 2016 measure that stripped cities and towns of their ability to regulate short-term and vacation rentals.

But a key Republican lawmaker, no fan of that 2016 law, said outright repeal is not politically realistic.

Rep. Aaron Lieberman, D-Paradise Valley, acknowledged Friday that the original measure passed with bipartisan support. The legislation was promoted to lawmakers as a way for people to get a little extra money by renting out a spare bedroom for special events.

But the reality, he said, has been quite different, with investors buying up homes solely to rent them out for weekends, creating de facto hotels.

Aaron Lieberman

Aaron Lieberman

“We bought in a residential neighborhood because we want to live with our neighbors, not with commercial enterprises that are showing up, literally neighborhood hotels that are showing up block after block,” Lieberman said.

Rep. Isela Blanc, D-Tempe, said there has been other fallout: a lack of affordable housing for people who actually live in those communities.

In Sedona, she said, half the housing that is unoccupied is short-term rentals

“Even larger communities such as Flagstaff are struggling with housing shortages being created by the short-term rental crisis here in our state,” Blanc said. The solution, she said, is to repeal the 2016 law.

“I don’t think that’s a big ask,” Blanc said.

“It’s not realistic,” said Rep. John Kavanagh, R-Fountain Hills.

Kavanagh is no fan of the vacation rentals. In fact, he was the only state senator to vote against the proposal.

“I wouldn’t mind seeing it repealed,” he said. “But there’s not a snowball’s chance in hell of a repeal avoiding a veto.”

That is based on comments made by Gov. Doug Ducey earlier this year when he signed Kavanagh-sponsored legislation to return some control of these rentals to local governments.

That law spells out that homes cannot be used for parties, restaurants, sales or other non-residential purposes and requires owners to provide a point of contact for police to call if there are problems. There also are fines for violations, potentially up to half the gross monthly proceeds after multiple violations.

But Ducey earlier this year told Capitol Media Services he has no interest in further rollbacks.

“We’re proud of the open-for-business reputation that Arizona has,” he said. And the governor is specifically opposed to the idea of local control on this issue.

“What we didn’t want is a patchwork of different laws throughout the state,” he said.

“We think that’s bad policy,” Ducey continued. “It’s not friendly to a growing economy.”

John Kavanagh

John Kavanagh

So Kavanagh is now co-chair of a bipartisan committee seeking to craft something that can not only get legislative approval but also the governor’s signature.

Lieberman denied that the decision of he and Blanc to introduce HB 2001 with its outright repeal is little more than political public relations. He said he believes that if the bill gets to the House floor – meaning Republican leadership actually assigns it to a committee and it gets approved there – it would be approved.

Even assuming that happens, however, that still leaves the governor’s opposition. But Blanc said the effort is worthwhile.

“Arizonans are asking, that is why,” she said.

“Because Flagstaff, Page, Sedona, rural Arizona is demanding that we do this,” Blanc continued. “It is because constituents, people are demanding it.”

Anyway, she said, repealing the 2016 law is a compromise because it still allows for control of these vacation rentals. The only difference is those decisions would be made by locally elected officials.

Greg Hague, a real estate broker, said repeal makes sense even if the new law prohibiting “party houses” does prove effective at curbing that kind of abuse.

“Is it right that businesses should be able to open up next door to me with people coming in and out every day?” he said.

“Even if they’re behaving themselves, it still changes the character of the neighborhood,” Hague said. “That is not what residential zoning is all about.”

And if nothing else, he said Arizona is the only state in the nation that has an outright ban on local control of such rentals.

Kavanagh said he believes there are things that could get approved by the Legislature.

One, he said, would be some sort of occupancy limit based on the number of bedrooms in a home.

He also said that renters should be required to use available off-street parking, with limits on outdoor activity after 9:30 p.m.

Politically trickier, he said, would be to enact a limit on the number of such rentals, a move that could address the concern about investors buying up all the available housing stock.

Kavanagh said there are precedents for that.

For example, the 2010 law legalizing marijuana for medical purposes has a limit on the number of dispensaries statewide, currently about 130. And even proposals for recreational marijuana being promoted for the 2020 ballot also have caps.

He also pointed out that the number of liquor stores also is capped in state law.

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